The U.S. economy is going to fall into a recession next year, according to Steve Hanke, a professor of applied economics at Johns Hopkins University, and that’s not necessarily because of higher interest rates.  “We will have a recession because we’ve had five months of zero M2 growth, money supply growth, and the Fed isn’t even looking at it,” he told CNBC’s “Street Signs Asia” on Monday.

In recent months, money supply has stagnated and that’s likely to lead to an economic slowdown, Hanke warned.  “We’re going to have one whopper of a recession in 2023,” he said.  Meanwhile, inflation is going to remain high because of “unprecedented growth” in money supply in the United States, Hanke said.

Historically, there has never been “sustained inflation” that isn’t the result of excess growth in money supply and pointed out that money supply in the U.S. saw “unprecedented growth” when Covid began two years ago, he said.  “That is why we are having inflation now, and that’s why, by the way, we will continue to have inflation through 2023 going into probably 2024,” he added.

“The bottom line is we’re going to have stagflation — we’re going to have the inflation because of this excess that’s now coming into the system,” he added.  “The problem we have is that the [Fed Chair Jerome Powell] does not understand, even at this point, what the causes of inflation are and were,” Hanke said.

Powell, in his policy speech at the annual Jackson Hole economic symposium on Friday, said he views the high inflation in the U.S. as a “product of strong demand and constrained supply, and that the Fed’s tools work principally on aggregate demand.”

This fall echoes dangerous parallels to the previous economic crisis of 2008-9. Some points for prayer for the USA and the world

1. According to John Williams of shadowstats.com, if honest numbers were being used the real rate of unemployment in the United States would be over 24 percent. About half of all U.S. companies say that they will be eliminating jobs within the next 12 months.

2. According to John Williams of shadowstats.com, if the rate of inflation was still calculated the way that it was back in 1980, the real rate of inflation would be somewhere around 17 percent right now.

3. At one company, the number of Americans taking out short-term loans for groceries has nearly doubled this year.

4. One out of every five home sellers in the United States dropped their asking price last month.  This is more evidence that home prices are starting to rapidly move in a downward direction. Sales of previously owned homes were about 20 percent lower this July than they were last July. One recent survey found that 3.8 million Americans believe that they could be evicted from their homes within the next two months. 

5. According to the National Energy Assistance Directors Association, approximately 20 million U.S. households are currently behind on their utility bills. 

6. The Dow Jones Industrial Average has fallen for three weeks in a row.  We also witnessed this sort of a gradual slide just prior to the big crash of 2008. 

7. In August, a whopping 2,150 corporate executives sold off shares in their companies.  Are they trying to cash in while they still can? 

More:   Prophecy newswatch, CNBC

Pray:

Pray for God’s children to find His protection and provision as in Goshen. (Genesis 45:10)

Pray for listening ears and obedient hearts to position ourselves as God directs. (Proverbs 25:12)